What Happened Overnight

Risk assets staged a partial recovery in the Asian session after Thursday's brutal selloff. BTC jumped from $69,800 to $71,362, reclaiming the $71K handle with conviction. ETH led the bounce at +4.4%, pushing back above $2,100. The move came despite the Fear and Greed Index sitting at just 15 — deep Extreme Fear territory — which suggests short covering and dip buyers rather than genuine risk appetite returning.

Brent crude opened flat near $100.46 after settling above $100 for the first time since August 2022. Iran's new Supreme Leader Mojtaba Khamenei doubled down on keeping the Strait of Hormuz closed, calling it "a tool to pressure the enemy." S&P 500 futures are up 0.25% in pre-market, hinting at a modest relief bounce after yesterday's 1.5% drop.

The Big Story: PCE Day Meets Oil Shock

Today's main event is the January Personal Consumption Expenditures (PCE) price index at 13:30 UTC. This is the Fed's preferred inflation gauge, and it lands at the worst possible time. Consensus expects headline PCE at +0.3% MoM / +2.9% YoY, with core PCE at +0.4% MoM / +3.1% YoY.

Any upside surprise in core PCE will be read as confirmation that the Fed is stuck. Rate cut expectations have already collapsed — the market now prices just one cut in December, down from three cuts expected a month ago. A hot print could take even that off the table.

University of Michigan consumer sentiment (preliminary March reading) is also due at 15:00 UTC. The 5-year inflation expectations component is what matters here. If consumers start anchoring higher inflation expectations because of $5/gallon gas, the Fed's job gets materially harder.

Bitcoin: Key Levels

BTC's overnight bounce is encouraging but not yet conclusive. The $69,000 floor has held for over a week now through multiple macro shocks, which is constructive.

  • Support: $69,000 (the line in the sand — if this breaks, $67,500 is next)
  • Support: $67,500 (February swing low, last line before $65K)
  • Resistance: $72,500 (Monday's high, needs a clean break)
  • Resistance: $74,000 (the gap to fill from last week's selloff)

Bias: Cautiously bullish. The disconnect between Extreme Fear (15) and price holding above $69K is notable. Historically, F&G readings below 20 combined with price stability tend to resolve upward. But PCE could override everything today — a hot print would pressure all risk assets, and a cool one could trigger a sharp relief rally through $72.5K.

Gold (XAUUSD): Key Levels

Gold is treading water at $5,156, pulled in two directions. The war bid keeps a floor under it, but dollar strength from fading rate-cut expectations caps the upside. Yesterday it touched $5,238 before retreating on the CPI-driven dollar bounce.

  • Support: $5,100 (round number + this week's pivot zone)
  • Support: $5,050 (has held through every escalation since the war began)
  • Resistance: $5,238 (yesterday's intraday high)
  • Resistance: $5,300 (psychological level, untested)

Bias: Bullish. As long as Brent stays above $100 and the Strait of Hormuz remains shut, gold's floor keeps rising. A weak PCE print would remove the dollar headwind and likely send gold straight for $5,300. Even a hot PCE may not derail it — stagflation is historically gold's best environment.

Macro Calendar (Friday, March 13)

  • 13:30 UTC — US PCE Price Index (January) — HIGH IMPACT
  • 13:30 UTC — US Personal Income & Spending (January)
  • 15:00 UTC — University of Michigan Consumer Sentiment (March prelim) — MEDIUM IMPACT
  • 15:00 UTC — UMich 5-Year Inflation Expectations — watch this closely

What to Watch Today

  • PCE at 13:30 UTC is the trigger. Core PCE above 0.4% MoM = rate cuts are dead for 2026 H1. Below 0.3% = relief rally across the board.
  • Brent crude's $100 hold. Any US Navy escort operation announcement for the Strait of Hormuz would be the one thing that could break crude lower fast.
  • BTC's $69K floor. A ninth consecutive day holding this level while F&G sits at 15 would be a powerful signal.
  • Dollar index (DXY). Strength here pressures both BTC and gold. PCE is the key driver today.
  • End-of-week flows. It's Friday the 13th. Portfolio managers will want to de-risk ahead of a weekend where the Hormuz situation could escalate further.